Jul062011

Sen. Reid’s “Sense of the Senate” resolution (S. 1323), currently on the Senate floor, contains no actual policy. It notes several class-warfare non-sequiturs, and then calls on Americans making more than $1 million per year “to make a more meaningful contribution to the deficit reduction effort.”

In order to help Sen. Reid make a more meaningful contribution to this debate, below are revenue projections for each of several specific tax increases Democrats have proposed or championed during the ongoing debt-limit debate and negotiations, and the approximate amount of time each proposal might plug the federal budget deficit, projected in 2011 to be $1.48 trillion (or roughly $4.05 billion per day).

Tax Increase Idea

10-Year Score (source)

Average Annual Revenue Increase

Time Closing Budget Deficit

Capping Itemized Deductions at

a 28% Rate

$293 Billion (JCT)

$29.3 Billion

7 days, 6 hours

Repealing “Last in, First Out” Inventory Accounting Method

$97.5 Billion

(JCT)

$9.75 Billion

2 days, 10 hours

Ending Expensing of Exploration and Development Costs for Energy Extraction

$10 Billion

(JCT)

$1 Billion

6 hours

Ending Expedited Expensing of Corporate Jets

$3 Billion

(media reports citing Democratic sources)

$300 Million

1 hour

TOTAL

$403.5 Billion

$40.35 Billion

9 days, 23 hours

The four tax increases Democrats have publicly or privately advanced in the deficit reduction debate would reduce the federal deficit by – at most – $40.35 billion a year, a little less than the United States currently borrows every 10 days.

Even if fully implemented, and even in the unlikely event that these tax hikes do bring in their full projected amount, they will barely make a dent in the deficit, and almost none in a $14.3 trillion national debt.

These are unserious deficit-reduction proposals -- but they are very serious jobs-reduction proposals. $40.35 billion is equal to roughly 69,000 average middle class jobs, which cost private businesses about $58,500 each to create.